Credit and Prepaid Card News
The latest news on the credit card and prepaid card industry from the Center for Responsible Lending.
- T-Mobile Enters Prepaid Card Market
Washington Post 22 Jan 2014
T-Mobile introduced a prepaid card on Jan. 22, following other retailers like Wal-Mart, Walgreens, and Target into the banking world.
- 'No-Interest-Now' Deals Can Be Risky
USA Today 26 Dec 2013
Many shoppers can save money in the long run by avoiding zero-percent, "no-interest-now" deals during the busy holiday season. Odysseas Papadimitriou, founder and CEO of the personal finance websites CardHub and WalletHub, notes that deferred-interest-rate deals are an extremely popular offering right now. Consumer watchdogs, however, warn that there are many ways for shoppers to end up paying more than what they anticipated under these deals.
- Amex Fined After Staff Misled Customers
Financial Times 25 Dec 2013
American Express (Amex) has agreed to $75.7 million in fines and reimbursements to customers after regulators discovered that its sales staff misled customers about the benefits of many credit card insurance products.
- Signature Cards More Prone to Fraud
Fox Business 20 Dec 2013
Credit counselors say credit card cash advances should only be a last resort, and their advice is backed by a new CreditCards.com survey of cash advance rates and fees on the top 100 credit cards.
- How Strict Limits on Debit-Card Fees Created More Free Checking
Bloomberg Businessweek 11 Dec 2013
Five years after the financial crisis, researchers now have enough data to better understand how reforms to consumer finance have produced intended and unintended consequences. A recent paper found that the 2009 CARD Act, which banned some profitable but abusive credit card practices, has saved consumers $20.8 billion a year. Banks argued that it also tightened access to credit, but a new analysis from the Federal Reserve Bank of Kansas City suggests that caps on swipe fees for debit cards have widened consumer access to free checking accounts.
- Consumer Bureau Hits Medical Financing Company CareCredit With $34.1 Million Action
Washington Post 11 Dec 2013
The Consumer Financial Protection Bureau (CFPB) has ordered medical financing company CareCredit, an arm of General Electric, to pay $34.1 million for providing inadequate disclosures and using deceptive enrollment practices. The funds will help reimburse more than 1.2 million CareCredit customers who incurred credit card penalties and fees since 2009.
- Is 18 Too Young for Credit Cards?
MarketWatch 08 Nov 2013
A new study on the credit card behavior of young adults suggests that a provision in the Credit Card Accountability, Responsibility and Disclosure Act of 2009 -- intended to keep many people under 21 years of age from getting a credit card -- was misguided and unnecessary.
- New Tactics Keep College Kids Hooked on Plastic
CNBC News 04 Oct 2013
Since passage of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, use of credit cards among college students has declined. Debit cards, however, are becoming more common and now are used by nearly 80 percent of students, a survey by Sallie Mae and Ipsos found. Many student ID cards double as debit cards, and prepaid cards are gaining popularity among parents who want to better control their kids' spending. The problem with prepaid and debit cards is that they do not allow students to build a credit record, and they often come with fewer marketing restrictions.
- Chase Scraps Joint Credit Cards
CNN Money 24 Sep 2013
In a move likely to be copied by other banks, Chase has announced it will no longer allow customers to open joint credit cards -- a popular option for couples sharing the responsibility of repayment.
- JPMorgan Fined $389 Million for Deceptive Credit Card Practices
Washington Post 20 Sep 2013
The Office of the Comptroller of the Currency (OCC) on Thursday hit JPMorgan Chase with $389 million in penalties for duping millions of customers into buying expensive and unnecessary services when they signed up for credit cards.
- Banks Probe Regulatory Limits of Credit Card Add-Ons
American Banker 17 Sep 2013
American Express, Wells Fargo, and Citigroup all seem to be testing how far they can go with credit card add-on services, even though regulators are preparing for another round of crackdowns on these controversial products.
- Ranking the States: Credit Card Debt
Washington Post 20 Aug 2013
Data compiled by credit rating agency TransUnion shows that Alaska has the highest rate of credit card debt in the United States, owing an average of $6,910 -- nearly $2,000 more than the national average.
- Credit Card Delinquencies Reach 18-Year Low
CNN Money 02 Apr 2013
Delinquencies on credit cards issued by banks hit the lowest point in 18 years after plummeting to 2.47 percent in the fourth quarter, reports the American Bankers Association (ABA). The decline throughout 2012 sends a signal that consumers are attempting to get debt under control...
- Credit Card Users Smarten Up
U.S. News & World Report 13 Mar 2013
Americans are becoming more thrifty, according to new data from rating agency Fitch. The share of delinquent accounts is at the lowest level since 1991, with more credit card borrowers paying off their balance in full each month and fewer carrying a balance. The typical credit card charge-off rate peaked at 11.4 percent in early 2010 but began to fall abruptly by 2011. The Federal Reserve recently reported that the total number of credit card accounts fell from nearly 500 million in 2008 to 380 million now. Two area where Americans are not deleveraging are student loans and federal debt. Total student loan balances are nearly $1 trillion, with default rates exceeding any other type of debt. Americans' savings rates also continue to decline.